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Council tax payment issues ‘rocket’

The number of people struggling with their council tax payments has “rocketed” to become the most common type of debt problem Citizens Advice now deals with.

Some 27,000 people with council tax arrears problems got help from the charity in the first three months of 2014, marking a 17% upswing on the same period last year.

Overall, one in five people reporting debt problems to Citizens Advice has a council tax arrears issue and the charity said this problem has now overtaken credit card and personal loan debt to become the number one type of debt that people approach it about.

Council tax arrears are a serious problem for in-work households, the charity said. Between January and March 2014, 42% of those approaching Citizens Advice for help with council tax arrears were in employment.

Citizens Advice said the number of people struggling with council tax payments has “rocketed” since council tax benefit was replaced by council tax support schemes, which are run on a local basis, in April 2013.

Council tax support is a discount that helps people on low income to pay their council tax and the amount of support you get depends on your circumstances.

Citizens Advice said the support is available to people in and out of work, but levels now vary from one council to the next.

Of those asking for advice from the charity for help with council tax issues, one in six (16%) also had a credit or store card problem, one in five (21%) had a personal loan problem, a similar proportion (18%) had a fuel debt issue and one in 20 (5%) had a mortgage arrears problem.

Gillian Guy, Citizens Advice chief executive, said: “For some households council tax bills can be the tipping point that plunges them into debt. Last year over 90,000 people came to Citizens Advice looking for help with council tax arrears as they struggle in the face of low incomes, rising prices and reduced financial support.

“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems that come through our doors, but since the end of council tax benefit we’ve seen council tax arrears problems go through the roof.

“As their budgets shrink local authorities are increasingly stretched, but they must ensure that the resources available for their local council tax support scheme are focused on those who are most in need.”

Local government minister Brandon Lewis said: “This Government has delivered an 11% real-terms cut to council tax bills for hard-working families across the country. This is potentially worth up to £1,100 to the average band D taxpayer over the course of this Parliament.

“Our measures give taxpayers more room for managing their household budgets. Latest official annual figures show arrears are falling and collection rates across the country now stand at 97.4%.

“Council tax benefit doubled under the last administration costing every household £180 a year, so welfare reform is a vital part of reducing the inherited deficit. Locally designed council tax support gives councils stronger incentives to cut fraud and support people to get back into work.
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